Cronos Group(US:CRON) CNBC·2025-11-13 17:40Core Viewpoint - The hemp industry faces significant challenges, including layoffs, production cuts, and potential losses exceeding billions in revenue due to a new congressional ban on nearly all hemp-derived consumer products, which will take effect in one year [3][5][12]. Industry Impact - The new legislation bans products containing more than 0.4 milligrams of total THC per container, which is expected to eliminate 95% of the $28 billion hemp retail market [5][10]. - Over 300,000 jobs linked to the hemp economy are at risk, affecting farmers, extractors, manufacturers, logistics firms, and retailers [9]. - The economic fallout will be most severe in states with significant hemp infrastructure, such as Kentucky, Texas, and Utah [10]. Legislative Background - The new cap replaces the 2018 Farm Bill's definition of hemp, which allowed products with less than 0.3% THC by weight [6][12]. - The ban is seen as a reversal of the 2018 legalization efforts led by Senator Mitch McConnell, who aimed to establish hemp as a national agricultural commodity [11][12]. Market Dynamics - The demand for hemp-derived THC products is expected to remain strong, potentially driving consumers to the black market, which poses risks due to lack of regulation and safety [14][15][16]. - Executives warn that the ban could push small businesses and retailers into the illegal market, increasing risks for consumers and complicating law enforcement efforts [16][17]. Future Considerations - Industry leaders advocate for federal standards rather than prohibition, suggesting a regulatory model that includes oversight from the FDA and taxation by the Alcohol and Tobacco Tax and Trade Bureau [18]. - The industry is mobilizing for lobbying efforts to replace the ban with regulations focused on testing, labeling, and age restrictions [20][21]. - Anticipated changes in legislation could significantly influence the future of investments and the hemp industry [22].